The Water Efficiency Gap

Title: The Water Efficiency Gap
Format: Working Paper
Publication Date: 2015

Water managers throughout the world are increasingly challenged to provide reliable and affordable water supplies to growing human populations, under conditions of climate variability and competing demands. At the same time, there is growing recognition of the interconnections between water and energy use (the water-energy nexus), and calls for integrating water and energy policy. If any regulatory integration is to occur, it is important to understand the dynamics of water management and how it compares to the management of the energy system. Furthermore, lessons learned from the energy sector may transfer to the water sector. The concept of the energy efficiency gap has been used to understand the market and non-market barriers that create and sustain an inefficient energy system. We explore to what degree the understandings of the energy efficiency gap can be applied to water management to produce efficiency gains. Water systems typically fall far short of operating at economically and technically achievable levels of efficiency. We find that in many sectors of the economy, these failures are determined more by political institutions than by markets. To illustrate, even in times of scarcity, water management agencies typically do not raise prices. In contrast, most American energy resources are privately owned, and the market provides greater incentive for owners to consider scarcity in their decisions (Olmstead 2010). We argue that while there are substantial differences in the markets for energy and for water, there are many barriers to achieving efficiency that are common to water and energy. Parallel opportunities for reducing the water efficiency gap include improved data reporting, improved metering, revised rate structures, improved information and management strategies, residential rebate programs, public–private partnerships for irrigation efficiency, benchmarks for thermoelectric cooling, and product efficiency standards.

Ivan Allen College Contributors:
External Contributors: Caroline Golin*, Matt Cox, and Valerie Thomas

Caroline Golin*, Matt Cox, Marilyn Brown, and Valerie Thomas. 2015. "The Water Efficiency Gap" School of Public Policy, Georgia Institute of Technology, Working Paper #85.

  • Energy Efficiency
Related File: WorkingPaper85.pdf
Related Departments:
  • Climate and Energy Policy Laboratory
  • School of Public Policy